As an investor, why is crypto so hard to value?
fundamentalinvestor.substack.com
As an investor, why is crypto so hard to value?
1–10 of 193 posts
Re: As an investor, why is crypto so hard to value?
#2Tldr investing vs speculating
Re: As an investor, why is crypto so hard to value?
#3The value of cryptocurrency is 0.
Re: As an investor, why is crypto so hard to value?
#4Crypto value is whatever you want it to be.
Re: As an investor, why is crypto so hard to value?
#5The author looks at this from the perspective of making money.
Bitcoin is a form of money.
It's like HTTP/HTTPS vs IPv4/IPv6. Bitcoin operates at a lower level than stocks, looking at it from that perspective is like looking at the facebook home page and trying to understand the value of IPv6.
Investing/speculating is all about increasing a counter. Here we are talking about another separate counter.
Re: As an investor, why is crypto so hard to value?
#6The value of cryptocurrency is 0.
Maybe below zero due to all the wasted energy?
Re: As an investor, why is crypto so hard to value?
#7It’s not entirely the same but transaction fees paid to the platform can be considered revenue.
Re: As an investor, why is crypto so hard to value?
#8The value of cryptocurrency is 0.
[deleted]
Re: As an investor, why is crypto so hard to value?
#9Depending on the underlying contract / agreement it can be anything you want. I view crypto as any piece of paper.
In general crypto is freely tradable / sellable, and the markets/tools are there. Illiquid 'assets' are a lot more liquid than when hidden / on paper somewhere.
Want the crypto to represent shares in a company? They're worth that.
Want an NFT to represent the ownership or the beneficiary of the profits of some music/IP? Can be worth millions or 0. Depending on the success of that IP.
Want to notarize something on a public blockchain for future proof / timestamping? Probably worth about $500-$2000 or whatever your notary charges.
Want the crypto to represent karma points on hackernews? Priceless!
Re: As an investor, why is crypto so hard to value?
#10With the methods the author is using, I think they would also be unable to value gold and other non-producing assets.
Crypto (despite claims that it's a currency) is a digital "asset". Like gold, but without any real-world use like jewellery, coatings, etc, and with a far shorter history of being a store of value. The problem with valuing it then is due to assessing risk.
It could be trading at zero tomorrow, and there are plenty of plausible paths to that scenario.